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Heather Dickinson is evaluating a business opportunity to sell make-up kits at fashion shows. Heather can buy the make-up kits at a wholesale cost of
Heather Dickinson is evaluating a business opportunity to sell make-up kits at fashion shows. Heather can buy the make-up kits at a wholesale cost of $30 per set. She plans to sell the kits for $80 per set. She estimates fixed costs, such as travel costs, booth rental cost, and lodging to be $900 per fashion show. Required: Determine the number of make-up kits Heather must sell per show to break even. 5 marks. Assume Heather wants to earn a profit of $1,100 per show before taxes. Determine the sales volume in units necessary to earn the desired profit. 5 marks. Determine the sales volume in dollars necessary to earn the desired profit. 5 marks. Using the contribution margin format, prepare an income statement to confirm your answers to requirements (a) and (b) above. 5 marks
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